LAS VEGAS, Nevada – Federal Deposit Insurance Corporation Jelena McWilliams told reporters last Monday about the department’s goal to create a roadmap for banks to start acquiring digital assets.
This goal also provides clearer and more understandable rules and regulations about acquiring cryptocurrencies, especially when banks use them as collaterals or as assets to include in their balance sheets. Williams said in an interview that the FDIC needs to “allow banks in this place, while appropriately managing and mitigating risk.”
More importantly, the FDIC can properly regulate the banks’ transactions to prevent the banks’ acquisition beyond the department’s jurisdiction.
McWilliams intends to coordinate with the FDIC, Federal Reserve, and the Office of the Comptroller of the Currency.
Some banks started exploring the idea of including digital assets into their balance sheets. For example, US Bancorp officially announced the launch of the bank’s cryptocurrency custody service for investment managers.
However, this goal also presents numerous problems the FDIC must address. For example, McWilliams expressed concerns about how to use cryptocurrency as a form of collateral in loans. More importantly, McWilliams is unsure of how to include cryptocurrency assets in the bank’s balance sheets.
Furthermore, the FDIC must also consider the tremendous volatility and fluctuations in digital assets. According to McWilliams, the company would need the adjust its balance sheets to compensate for the changes in fair value.
McWilliams further states that the banks need to “decide what kind of capital and liquidity treatment to allocate to such balance sheet holdings.”